Excerpt:.....easily defeat the provisions of section 34 by presenting a return under section 22(3) after the period of four years mentioned in section 34(3) while not incurring any liability to be assessed under section 22(3). unless that conclusion is inevitable from the language of the provisions noted above, such a conclusion cannot be accepted. first additional income-tax officer, tuticorin, and this is what their lordships observed in that case :it should be taken as well settled now that where an assessee has filed his return before the completion of assessment within the period of limitation allowed by law, proceedings cannot be commenced by the assessing authority under section 34 of the act -see muthiah thevar v. otherwise, section 34 can be made ineffective by purporting to have recourse..........and for this, there is no limit of time. it further laid down that where in respect of any year a return has been voluntarily submitted before assessment the income-tax officer cannot choose to ignore the return and any notice of reassessment and consequent assessment under section 34 ignoring the return is invalid. 2. the material facts of this case are as follows : the petitioner was a manufacturer of handloom goods. according to her own showing she was manufacturing handloom goods for over 25 years prior to 1958. but at no time she submitted any return under section 22 of the income-tax act. on january 25, 1958, she submitted a return of her income for the assessment year 1950-51, the previous year ending on march 31, 1950. the income-tax officer did not and admittedly he.....

Judgment:

Hedge, J.

1. The contention of Sri K. Srinivasan, the learned counsel for the assessee, is that the facts of this case come within the rule laid down by the Supreme Court in Commissioner of Income-tax v. Ranchhoddas Karsondas. In that case, the Supreme Court laid down that a return in answer to the general notice under section 22(1) of the Income-tax Act can, under section 22(3), be filed at any time before assessment and for this, there is no limit of time. It further laid down that where in respect of any year a return has been voluntarily submitted before assessment the Income-tax Officer cannot choose to ignore the return and any notice of reassessment and consequent assessment under section 34 ignoring the return is invalid.

2. The material facts of this case are as follows : The petitioner was a manufacturer of handloom goods. According to her own showing she was manufacturing handloom goods for over 25 years prior to 1958. But at no time she submitted any return under section 22 of the Income-tax Act. On January 25, 1958, she submitted a return of her income for the assessment year 1950-51, the previous year ending on March 31, 1950. The Income-tax Officer did not and admittedly he could not proceed to assess her on the basis of her return. He took steps under section 34 of the Income-tax Act and assessed her escaped income. The question is whether the assessment under section 34 is a valid assessment in view of the decision of the Supreme Court cited above. In the case before the Supreme Court the return had been submitted within the period prescribed under section 34(3), whereas in the present case, the return was submitted long after the period prescribed therein. Section 22(3) says :

'If any person has not furnished a return within the time allowed by or under sub-section (1) or sub-section (2), or having furnished a return under either of those sub-sections, discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made.'

3. The next relevant section is section 34(3), which reads thus :

'34. (3) No order of assessment or reassessment, other than an order of assessment under section 23 to which clause (c) of sub-section (1) of section 28 applies or an order of assessment or reassessment in cases falling within clause (a) of sub-section (1) or sub-section (1A) of this section shall be made after the expiry of four year from the end of the year in which the income, profits or gains were first assessable.'

4. From the foregoing it is clear that no assessment con be made under section 22(3) on the basis of a return submitted after the expiry of four years from the end of the year in which the income, profits or gains were first assessable. If the contention of Sri Srinivasan is correct, in the present case and in like cases, the assessee could easily defeat the provisions of section 34 by presenting a return under section 22(3) after the period of four years mentioned in section 34(3) while not incurring any liability to be assessed under section 22(3). Unless that conclusion is inevitable from the language of the provisions noted above, such a conclusion cannot be accepted. The question for our consideration is as to what meaning we should attach to the words 'at any time before the assessment is made'. Should we not read those words as meaning at any time before the assessment is or can be made ?' This question came up for consideration before a Bench of the Madras High Court in Santosha Nadar v. First Additional Income-tax Officer, Tuticorin, and this is what their Lordships observed in that case :

'It should be taken as well settled now that where an assessee has filed his return before the completion of assessment within the period of limitation allowed by law, proceedings cannot be commenced by the assessing authority under section 34 of the Act - see Muthiah Thevar v. Commissioner of Income-tax - where the law laid down by the Supreme Court in Commissioner of Income-tax v. Ranchhoddas Karsondas was applied. Section 22(3), it should be remembered, permits a return to be filed at any time before the assessment is made, even no return was filed in response either to the general notice under section 22(1), or any individual notice under section 22(2). The learned counsel for the department urged that section 22(3) carried its own limitation. In our opinion his submission was correct, that what section 22(3) permitted the assessee was to file his return at any time before the assessment could be lawfully made. The normal period of limitation, barring the exceptions for which section 34(3) provides, for making an assessment being four years, the contention of the learned counsel for the department was that the return filed after a period of four years could not lead to any lawful assessment, and it should, therefore, be treated as non est in law. We agree that the principle laid down in Commissioner of Income-tax v. Ranchhoddas Karsondas and applied by this court in Muthiah Thevar v. Commissioner of Income-tax cannot be extended to this case, where the return for 1945-46 was filed by the assessee, the petitioner, after the expiry of the period of four years.'

5. We are in respectful agreement with the above conclusion. Otherwise, section 34 can be made ineffective by purporting to have recourse to section 22(3) after the period of limitation mentioned in section 34.

6. We are unable to accept the contention of Sri Srinivasan that the present case may very well have come within the scope of section 28(1)(c) in which case it would be taken out of the period of limitation mentioned in section 34(3). The facts established do not bring the case within the scope of section 28(1)(c).

7. For the reasons mentioned above, this petition fails and the same is dismissed with costs. Advocate's fee Rs. 100.